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NEW YORK (TheStreet) -- Magellan Petroleumundefined has been upgraded by TheStreet Ratings from Sell to Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MAGELLAN PETROLEUM CORP (MPET) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.0%. Since the same quarter one year prior, revenues rose by 26.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MPET has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.48, which clearly demonstrates the ability to cover short-term cash needs.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, MAGELLAN PETROLEUM CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for MAGELLAN PETROLEUM CORP is rather low; currently it is at 19.93%. Regardless of MPET's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, MPET's net profit margin of -3.32% significantly underperformed when compared to the industry average.
- You can view the full analysis from the report here: MPET Ratings Report